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#34847 - 09/27/02 04:23 AM Reg CC and Notices sent after the fact
Anonymous
Unregistered

We have a new teller in one of our branch offices who missed a check on which a hold should have been placed. I know hold notices should be given to the customer right away if the transaction is in person, however, do we have any leeway to correct the mistake the next day if it was missed? I never see this area addressed in the reg.

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#34848 - 09/27/02 11:31 AM Re: Reg CC and Notices sent after the fact
Anonymous
Unregistered

You do have up until the next day but there is a caveat. If the customer is not aware of the hold when he/she leaves the branch they may start writing checks. If these checks are bounced and the check the hold was placed on is paid, then the customer may request his return check charges be reimbursed and you are obliged to do so. It is so much easier if it is done originally. This also would hold true for night drop or ATM deposits.

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#34849 - 09/27/02 02:03 PM Re: Reg CC and Notices sent after the fact
ahou Offline
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ahou
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Here's an excerpt from Federal Reserve Board Special Notice--Compliance with the Expedited Funds Availability Act and Regulation CC

"Give a notice when you delay availability if your policy, for example, is to provide immediate or next-day availability but you retain the right to place a hold on a deposit from time to time (or if you delay a check for longer than the federal schedules based on an allowable exception).

The last category of disclosures includes notices you must give when certain events occur or notices that you have taken certain actions. If you impose case-by-case or exception holds, you must generally give the customer a notice at the time the deposit is made. The notice may be given later in three situations:

(1) if the deposit is not made in person to an employee of your institution;

(2) if the decision to place a case-by-case hold is made after the deposit was made (for example, if itís made by the tellerís supervisor after the customer has left the branch); or

(3) if you learn of the facts that give rise to an exception hold after the deposit was made."

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#34850 - 09/27/02 05:41 PM Re: Reg CC and Notices sent after the fact
Comply 101 Offline
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Comply 101
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Quote from 12 CFR 229.16 Timing of notice "The notice shall be provided to the depositor at the time of deposit, unless the deposit is not made in person to an employee of the depository bank or the decision to extend the time when the deposited funds will be available is made after the time of deposit. If notice is not given at the time of deposit, the depository bank shall mail or deliver the notice to the customer not later than the first business day following the banking day the deposit is made" As a side note, I would recommend calling the customer as well. As was pointed out earlier, if the check on hold does not come back, you must reverse any fees that the hold caused if the customer requests it.

These are my opinions and not those of my employer.
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#34851 - 06/03/03 06:16 PM Re: Reg CC and Notices sent after the fact
Anonymous
Unregistered

Here's our situation. Customer makes ATM deposit, bank decides to place a hold and mails the hold notice to the customer and the procedure is to also telephone the customer that a hold is being placed. Customer is now alledging that she did not receive the hold notice and wants the banks to refund her overdraft fees. What is the bank's obligation for making sure the customer actually received the notice? Is the bank obligated to refund the fees in this instance? Thank you.

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#34852 - 06/03/03 06:49 PM Re: Reg CC and Notices sent after the fact
ahou Offline
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ahou
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3. Overdraft and returned check fees. If a depositary bank delays or extends the time when funds from a deposited check are available for withdrawal on a case-by-case basis and does not provide a written notice to its depositor at the time of deposit, the depositary bank may not assess any overdraft or returned check fees (such as an insufficient
funds charge) or charge interest for use of an overdraft line of credit, if the deposited check is paid by the paying bank and these fees would not have occurred had the additional case-by-case delay not been imposed. A bank may assess an overdraft or returned check fee under these circumstances, however, if it provides notice to the customer in the notice required by paragraph (c)(2) of this section that the fee may be subject to refund, and refunds the fee upon the request of the customer when required to do so.
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#34853 - 06/03/03 06:51 PM Re: Reg CC and Notices sent after the fact
Princess Romeo Offline

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The requirement to refund NSF fees is if the deposit is made "in person to an employee of the bank" and the notice is not given at that time.

Your ATM should have a sign that says "Funds deposited may not be available for immediate withdrawal." Point out that sign to her.
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#34854 - 06/03/03 07:17 PM Re: Reg CC and Notices sent after the fact
Anonymous
Unregistered

Our notice is on our deposit envelopes. However, the customer made the comment that she made the deposit at the ATM because she thought she could avoid the hold. Perhaps we need to look at posting a sign as well. Thank you for your help.

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#34855 - 06/03/03 08:32 PM Re: Reg CC and Notices sent after the fact
Princess Romeo Offline

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Where the heart is
Quote:

Our notice is on our deposit envelopes. However, the customer made the comment that she made the deposit at the ATM because she thought she could avoid the hold.



Oh geez.... Translation "I thought I could get around your system by sneaking through the ATM, and now I'm upset that it didn't work like I thought."
Hopefully, you met her statement with an icy-cold unblinking stare....

Quote:

Perhaps we need to look at posting a sign as well.




You should already have this sign. Look at Reg CC 12 CFR-
ß 229.18 Additional disclosure requirements.
(c) Automated teller machines. (1) A depositary bank shall post or provide a notice at each ATM location that funds deposited in the ATM may not be available for immediate withdrawal.

It may just be that you didn't notice you have the sign already!
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Regulations are a poor substitute for ethics.
Just sayin'

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#34856 - 06/03/03 09:57 PM Re: Reg CC and Notices sent after the fact
Anonymous
Unregistered

The commentary 229.18(c) indicates that the notice may be provided on deposit envelopes provided at the ATM. That is what we do so I believe we are in compliance there and our examiner was fine with it in our last exam. Just wondering if that is really the best method and that maybe we really should have a "sign" like we do for the ATM fees. It's not necessary but would it be a better "notification"? The other thing is that our hold notice is the same notice for in person and ATM deposits and includes the statement that if the funds are delayed and causes the account to overdraft the bank will refund the fees. Maybe we should have a separate notice for an ATM hold?? Thanks.

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#34857 - 06/04/03 02:57 AM Re: Reg CC and Notices sent after the fact
Princess Romeo Offline

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Where the heart is
You can do a very basic "plaque" or "sticker" (except stickers are easily torn off by those with nothing better to do...) that says "Funds deposited in the ATM may not be available for immediate withdrawal."

This has the benefit of being able to point such a notice out to anyone who deposits funds and then expects NSF fees to be waived.

Also, if your envelopes say the same thing as your lobby notice, and advises the customer that NSF fees due to delayed funds will be refunded, then you may very well need to refund those fees.

You should write a very simple Funds Availability Policy to outline these types of differences.
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CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#34858 - 06/04/03 12:02 PM Re: Reg CC and Notices sent after the fact
Elwood P. Dowd Offline
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Next to Harvey
Quote:

The requirement to refund NSF fees is if the deposit is made "in person to an employee of the bank" and the notice is not given at that time.





Bonnie, I cannot find the language that limits the refund of fees in connection with delayed notice to "in person" deposits. Can you please direct me to it?
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#34859 - 06/04/03 12:33 PM Re: Reg CC and Notices sent after the fact
rlcarey Online
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rlcarey
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Galveston, TX
Ken,

I can't find it either. The fee waiver is based on if the notice is not given at the time of deposit and a deposit into an ATM is received when it is made, unless it is a off premise ATM. It would seems that for on premise ATM's there is no getting around it unless your ATM's spit out a notice of hold
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#34860 - 06/06/03 07:11 PM Re: Reg CC and Notices sent after the fact
Anonymous
Unregistered

Is there anyone who goes ahead and refunds the fees if the customer requests regardless if the item is paid? I know the bank is going to ask "what are other banks doing", so I thought I would go ahead and ask first. Thanks!

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#34861 - 06/06/03 09:06 PM Re: Reg CC and Notices sent after the fact
Princess Romeo Offline

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Where the heart is
Quote:

I cannot find the language that limits the refund of fees in connection with delayed notice to "in person" deposits. Can you please direct me to it?




Commentary for 229.13(e)

5. If a depositary bank invokes this exception with respect to a particular check and does not provide a written notice to the depositor at the time of deposit, the depositary bank may not assess any overdraft fee (such as an "NSF" charge) or charge interest for use of overdraft credit, if the check is paid by the paying bank and these charges would not have occurred had the exception not been invoked. A bank may assess an overdraft fee under these circumstances, however, if it provides notice to the customer, in the notice of exception required by paragraph (g) of this section, that the fee may be subject to refund, and refunds the charges upon the request of the customer. The notice must state that the customer may be entitled to a refund of any overdraft fees that are assessed if the check being held is paid, and indicate where such requests for a refund of overdraft fees should be directed.

Commentary for 229.13(g)

c. For deposits made in person to an employee of the depositary bank, the notice generally must be given to the person making the deposit, i.e., "the depositor", at the time of deposit. The depositor need not be the customer holding the account. For other deposits, such as deposits received at an ATM, lobby deposit box, night depository, or through the mail, notice must be mailed to the customer not later than the close of the business day following the banking day on which the deposit was made.

d. Notice to the customer also may be provided at a later time, if the facts upon which the determination to invoke the exception do not become known to the depositary bank until after notice would otherwise have to be given. In these cases, the bank must mail the notice to the customer as soon as practicable, but not later than the business day following the day the facts become known. A bank is deemed to have knowledge when the facts are brought to the attention of the person or persons in the bank responsible for making the determination, or when the facts would have been brought to their attention if the bank had exercised due diligence.


It's a follow the dots trip through the Commentary. 229.13(e) sets the notice "at time of deposit", and 229.13(g) sets the standard for what is considered giving notice "at time of deposit."

I understand the rationale behind this as: If a customer walks into the bank to make the deposit, a bank employee has the opportuntiy to look at the item(s) being deposited and make a determination if an Exception Hold should be placed. If the bank employee passes on that opportunity when the customer is standing in front of him/her, then the customer should not have to pay the NSF fees because of the exception invoked later on.

However, when a customer uses an Automated Teller Machine, there is no opportunity for a bank employee to review the items and make any type of determination right then and there.

That's why the ATM is supposed to have a notice warning people that their funds may not be immediately available.
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CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#34862 - 06/06/03 09:09 PM Re: Reg CC and Notices sent after the fact
Anonymous
Unregistered

I am curious....would the bank have any responsibility to pay third party check return charges back to the customer?

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#34863 - 06/06/03 09:47 PM Re: Reg CC and Notices sent after the fact
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,292
Galveston, TX
Good one Bonnie - I love learning new things - Thanks!

A bank is under no obligation to refund third party fees - it's a customer service call.
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